Futures rose a fourth straight week as Libyan leader Muammar Qaddafi sent troops to recapture towns in western Libya and rebels repelled government attempts to retake oil hubs in the east. The U.S. Labor Department reported a gain of 192,000 jobs in February.
“There’s a lot of concern this is going to get worse in Libya and across the region,” said Phil Flynn, vice president of research at PFGBest in Chicago. “The economic numbers have been pretty good this week and that means good demand so there are a lot of reasons to be long.”
Gasoline for April delivery added 2.02 cents, or 0.7 percent to settle at $3.0464 a gallon on theNew York Mercantile Exchange, the highest settlement since Aug. 27, 2008. Gasoline advanced 11 percent this week, the largest increase since the week ended Oct. 16, 2009.
Libyan rebel forces said they have control of Ras Lanuf, where the country’s biggest oil refinery and one of its main tanker terminals are located, Al Arabiya television said. The oil facility at Zueitina, near Benghazi, was ablaze, the U.K.’s Daily Mail said.
“The genie is out of the bottle and it’s very difficult to contain it,” said Tom Knight, vice president of trading and supply at Truman Arnold Cos. in Texarkana, Texas. “The only thing that could potentially derail this is if expected protests in Kuwait and Saudi Arabia fizzled.”
Products futures are vulnerable to changes in Brent because refineries supplying fuel to New York Harbor, the delivery point for heating oil and gasoline futures, process crude grades priced relative to Brent.
Gasoline has surged 22 percent since anti-government protests began in Libya Feb. 15. The Libyan uprising follows the ousting of longtime rulers by protest movements in Tunisia and Egypt. Anti-government demonstrations have also erupted in Yemen, Bahrain, Oman, Jordan, Algeria, Morocco, Iran and Iraq.
Fighting in Libya reduced oil output in North Africa’s third-largest crude producer by two-thirds, or as much as 1 million barrels a day, according to the International Energy Agency, a Paris-based adviser to 28 oil-consuming nations.
Libya normally pumps almost 1.6 million barrels of oil a day, selling most of it to Europe, which exports gasoline to the U.S. and imports American diesel fuel. Less Libyan oil going to European refiners could reduce the region’s available gasoline exports and increase demand for distillate fuel from the U.S.
“People don’t dare to not be long in this market,” said James Cordier, portfolio manager at OptionSellers.com in Tampa, Florida. “People are playing with fire if they’re short. It’s the best game in town right now.”
Technical indicators showed the market has been “overbought” since Feb. 23. Gasoline’s 14-day relative strength index rose to 82.32 from 81.61 yesterday, Bloomberg data showed. A reading of 70 typically indicates prices are set to retreat, while 30 suggests they may rise.
Heating oil for April delivery gained 4 cents, or 1.3 percent to settle at $3.0893 a gallon, the highest settlement since Aug. 29, 2008. Prices rose 5.4 percent this week and have gained 13 percent since Feb. 15.
“The upside focus is on the distillate because there are disruptions to European supply forcing run cuts, and the arbitrage is more likely to attract distillates,” Knight said.
Regular gasoline at the pump, averaged nationwide, advanced 4.4 cents to $3.471 a gallon yesterday, AAA said on its website. That’s the highest level since Oct. 6, 2008.